Assignment on Branch Banking of First Security Bank Limited

Branch Banking:

Bank is nothing but an intermediary between lender (surplus unit) and borrowers (deficit unit). Savings and deposits are the main strength of the banks to provide loan. And the interest earned from the difference borrowing and lending is the major portion of banks income. Banks also earns from variety of operation. Branch banking includes four operational divisions in First Security Bank Limited. They are:

1. General Banking
2. Accounts Division
3. Loan And Advance
4. Foreign Exchange

 General Banking:

General banking is the side where banks offer different alternatives to the clients to deposit and remit their money. Accounts division is also included in general banking. To encourage the clients, bank offers different options in front of their clients. Most of these options are very much similar between the banks, but the customer services and facilities may not be the same. First Security Bank Limited has variety of services provided to the retail as well as for corporate clients.

 The services provided under general banking include the following:

• Account opening
• Account closing
• Cheque book issue
• Remittance
• Clearing
• Crossing
• Endorsements
• Dispatch

 Account Department

Account opening:

Initially all the accounts are opened through deposit money by the customer and these accounts are called deposit account. Normally a person needs to open an account to take services from the bank. Without opening an account, one cannot enjoy variety of services from the bank.  Thus, the banking usually begins through the opening of the account with the bank.

Bank accounts are mainly of three (3) types:

1. Current Deposit Account
2. Saving Bank Account
3. Fixed or Time Deposit

There are also some other types of account facilities provided by the bank. These are:

1.                       I.    Short Term Deposit (STD)
2.                     II.    Monthly Saving Schemes (MSS)
3.                    III.    Monthly Benefit Saving Scheme (MBSS)
4.                   IV.    Double Benefit Deposit Scheme (DBDS)

 1. Current Deposit Account:

A current account is a running and active account, which may be operated upon any number of times during a working day. It is purely demand deposit account because the bank is bound to pay the amount to the accountholder on demand at any time within the banking hour. There is no restriction on the number and the amount of withdrawals from a current account. Generally the minimum amount to be deposited initially is tk. 1000/- for opening a current account.

 2. Saving Bank Account:

A saving account is meant for the people of the lower and middle classes who wish to save a part of their incomes to meet their future need and intend to earn an income from their savings, it encourages savings of non-trading persons, institutions, society and clubs etc. The deposits are mostly small amounts. Frequently withdrawals are not allowed.

• Ø Opening of Current and saving Account:

A current or a saving account could be opened through the following steps:

Step: 1 

Application on the prescribed form: The person willing to open a current account with the bank has to apply in the prescribed form. The form must be filled up and signed accordingly by the applicant (s).

Step: 2

Documentation: The documents that must be provided by the party/parties willing to open a current account are mentioned according to different aspects:

 i)          Individual

• Two copies of passport size photograph
• Introducer’s signature in the A/C opening Card & photograph
•  Nationality Certificate/passport’s photocopy (duly attested)
• Nominee’s Photograph
• Mother’s name
• Date of Birth & age
• TIN

ii)         Proprietorship

• Two copies of passport size photograph
• Introducer’s signature in the A/C opening Card & photograph
• Nationality Certificate/passport’s photocopy (duly attested)
• Up-to-date copy of trade license
• Nominee’s Photograph
• Mother’s name
• Date of Birth & age
• Seal
• TIN

iii)        Partnership

• Passport size photograph A/C Operator authorized by partners) Two copies (each)
• Introducer’s signature in the A/C opening Card & photograph
• Nationality Certificate/passport’s photocopy (duly attested)
• Up-to-date copy of trade license
• Seal
• TIN
• Partnership deed (from Notary public), partnership letter

iv)        Limited company

• Passport size photograph A/C Operator (authorized by Board) Two copies (each)
• Introducer’s signature in the A/C opening Card & photograph
• Company resolution/Constitution
• Common seal of Company
• Memorandum & Articles of association (Certified by Joint Stock Company)
• List of Directors with sign
• Certificate of Incorporation
• Up-to-date copy of trade license
• Seal
• TIN

v)         Societies, Clubs, etc

• Passport size photograph A/C Operator (authorized by Board) Two copies (each)
• Introducer’s signature in the A/C opening Card & photograph
• Nationality Certificate/passport’s photocopy (duly attested)
• Up-to-date copy of Office Bearers/ Governing Body/ Managing Committee
• Memorandum & Articles of association
• Seal

Incase of saving account opening the following documents are required:

• Two copies of passport size photograph
• Introducer’s signature in the A/C opening Card & photograph
•  Nationality Certificate/passport’s photocopy (duly attested)
• Nominee’s Photograph
• Employer certificate

Step: 3

Introduction to the Applicant:

The applicant required to furnish in the application form the names of the referees from whom the banker may make requires regarding the character, integrity and respectability of the applicants. In most cases, the customer of the bank does the introduction or some other person known to the bank by signing on the application form with the account number.

Step: 4

Specimen signature:

Every customer is required to supply to his banker with one or more specimens of his/her signature. These signatures are taken on cards, which are preserved by the banker, and his signature of the account holder on the cheque is compared with Specimen signatures.

Final Step:

After the above formalities are over, the banker opens an account in the name of applicant. Then the bank provides the customer with:

    A pay in slip/deposit book: To facilitate the receipt of credit items paid in by a customer, the bank will provide the customer a pay in slip either loose or in a book forms. The customer has to fill up the pay in slip at the time of depositing the money with the bank. The casher with his/her initials and stamps will return the counter foil to the customer on the receipt of the money.

    Cheque Book: To facilitate withdrawals and payments to third parties by the customer, the bank will also provide a chequebook to the customer. But it is noted that to get a chequebook, the customer has to dully fill up the cheque requisition slip to the banker.

• Ø Closing of Current or Saving Account:

A customer’s account with a bank may be closed for the following circumstances:

 1. Upon the request of a customer, an account can be closed.

• The customer may inform the bank in written of his/her intention to close the account. The customer has to apply to the branch in charge for closing the account. Then the in charge will remark on the account closing application for closing the account.
• By drawing a cheque of the whole amount and a nil balance confirmation to be taken from the account holder.
•  Recover the unused cheque leaves and enter into the “Broken cheque book Register”
• Remove the account opening form, specimen signature card and all other papers relating to the closed account.
• Remarks of account closing at the ledger folio should be authenticated by the manager of supervising sfficials

 2. The bank may itself ask the customer to close the account when the banker finds that the account is not been operated for a long lime.

• If the account is not operated upon for 6 months the banker will try to do the bilateral communication with the account holder, but if the banker does not then the account becomes “Dormant” account get any response from the account holder
• If this not the operated upon for 2 years then the account becomes “inoperative” account.
• If the current account lying in “inoperative” current account for many years then the account will be transferred to the “unclaimed deposit account.
• A new register for unclaimed deposit account will be maintained called “unclaimed deposit account.
• For withdrawal at any amount from the account, permission from head office or controlling office wins is required.

 3. Fixed Deposit Receipt:

These are the deposits, which are made with the bank for fixed period specified in advance. It is purely a time deposit account. The bank doesn’t maintain cash reserves against deposits and therefore the bank offers higher rates of interest on such deposits. A FDR is issued to the depositor acknowledging  receipt of the sum of money mentioned therein.

 Procedure of Opening Fixed Deposit Account:

Before opening a Fixed Deposit Account a customer has to fill up an application form, which contains the following:

• Amount in figures
• Beneficiary’s name and address
• Period
• Rate of interest
• Date of issue
• Date o of maturity
• How the account will be operated (singly or jointly)
• Signature (s)
• F. D. R. no
• Special instruction (if any)

 After fulfilling the above information and deposit the amount, FDR account is opened. A FDR receipt is issued and it is recorded in the FDR Register, which contains the following information:

• FDR account no.
• FDR no.
• Name of the FDR holder with address
• Maturity period
• Maturity date
• Interest rate

 At present the rate of interest for Fixed Deposit Receipt (FDR) in the First Security Bank Limited are as follows:

 Other Types of Deposit Accounts:

There are also some other types of account facilities provided by the bank. These are:

i.   Short Term Deposit (STD)

ii.   Monthly Saving Schemes (MSS)

iii.  Monthly Benefit Saving Scheme (MBSS)

iv.  Double Benefit Deposit Scheme (DBDS)

 i. Short Term Deposit (STD)

It is also a time deposit account. The formalities for opening is of this account are to those required for current account. The only difference is that, frequent withdrawal is discouraged and 7 days notice is required for withdrawal of any sum and interest is paid.

In Short Term Deposit Account, interest offered is less than of savings deposit, 6% interest is paid on this deposit.

 ii. Monthly Saving Schemes (MSS)

Monthly Saving Scheme is that kind of scheme of FSBL, where deposit is monthly installments of various sizes for a fixed deposit and the benefit is lump sum returns after various terms of period.

The objectives of this scheme are:

• Building the habit of saving
• Attract small savers
• Saving for rainy days
• Ensure regular income flow

 So this scheme is introduced to attract depositors and encourage saving (mainly the smaller earner people).

 iii. Monthly Benefit Saving Scheme (MBSS)

Monthly Benefit Scheme is that kind of scheme, where a fixed amount of money has to be deposited every month for five years.

 Monthly benefit amount on the deposited amount are as under:

The objectives of this scheme are:

• Help the retired persons for investing their retirement benefits

• Create investment opportunities for non resident Bangladeshi
• Explore investment opportunities for school, college, university etc.

 iv. Double Benefit Deposit Scheme (DBDS)

In this scheme, a fixed amount of money, say tk. 50,000 or it’s multiply for 7 years has to be deposited. After 7 years deposited amount will be doubled.

 Deposit amount to be doubled in 7 years, details are as under:

The objectives of this scheme are:

• Give maximum profit

• Help in meeting specific needs like education, marriage etc.

• Ø Remittance:

Sending money from one place to other places for the customer’s is another important service of banks and this service is an important part of countries payment system. For this service, people specially businesspersons transfer funds from one place to another very quickly. There are various types of remitting money, such as:

 a. Pay Order (PO)

The pay order is used for making a remittance to the local creditor. Pay order gives the payee the fight to claim payment from the issuing bank, it can be en-cashed from issuing bank only. Unlike cheque, there is no possibility of dishonoring pay order because before issuing pay order bank takes out the money of the pay order in advance. Pay Order cannot be endorsed or crossed and so it is not negotiable instrument.

b. Demand Draft (DD):

Demand draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to the payee on demand that is the named person or order of the demand. It is generally issued when customer wants to remit money in any place, which is out side of the clearing-house area of issuing branch. Payee can be purchaser himself or another mentioned in the DO. It is a negotiable instrument and it can be crossed or not.

 c. Telegraphic or Telephonic Transfer (TT):

This method transfers money to one place to another place by telegraphic message. The sender branch will request another branch to pay required money to the required payee on demand. Generally, for such kind of transfer payee should have account with the paying bank. Otherwise it is very difficult for the paying bank to recognize the exact payee.

When sending money is urgent then the bank uses telephone for remittance. This service is only provided for valued customers, who is very reliable and with which banks have long-standing relationship.

 d. Mail Transfer Advice (MTA):

Where the remitter desires the banker to remit the funds to the payee instead of purchasing a draft himself the banker does it through a mail transfer advice. The payee must have an account with the paying officer as the amount remitted in such a manner is meant for credit to the payee’s account and not for cash payment. It is the least used technique for transferring fund. Where there is no telex machine or telephone line then this method is used.

• Ø Clearing:

Clearing house is an assembly of the locally operating scheduled banks for exchange of cheques, drafts, pay orders and other demand instruments drawn on each other and received from their respective customers for collection. The house meets at the appointed hour on all working days under the supervision of two central bank officers or its agent as the case may be, and works within the regulations framed therefore on the basis of prevailing banking practices. In Bangladesh, clearing house sites at Bangladesh bank where there is no office of the Bangladesh bank, Sonali bank acts as agent of Bangladesh bank.

There are mainly two types of clearing system in Bangladesh, such as:

• Internal clearing or inter branch clearing or inward clearing.
• External clearing or inter banks clearing or outward clearing.

The entire number banks representative daily conducts two meetings at a fixed time. In their first meeting they handover cheque, drafts etc. passed, which has drawn upon them. In case there are certain cheques, which could not be honored are returned to the presenting banks with the reason of non-payments in the second meeting at he clearing-house.

a. Operating Procedure:

Clearing operations are completed in three stages:

• Operation at branch level
• Operation at internal clearing house
• Operation at the clearing house in Bangladesh Bank

Bangladesh Bank clearing their house sites twice in a day. In its first meeting Bangladesh Bank clearing-house received instruments and distributes the same among the representatives comes with returned instruments and distributing among the representatives.

 b. Software:

Software called NIKASH supplied by Bangladesh Bank is used in clearing of the cheques and other instruments. The in-charge of clearing section makes clearing slip for each cheque through computer using NIKASH and finally this cheques are send to the Bangladesh Bank Clearing-House sorting bank wise.

• Ø Crossing:

Crossing cheque is written across the face of the cheque within two parallel lines. This practice becomes common even outside of clearing house, as an element of safety.

a. Purpose of crossing:

• To avoid possible loss that may occur by open cheques getting into the hands of wrong parties
• Crossing is a direction to the paying bank to pay the money generally to a bank or a particular bank; so that it can be easily traced out for whose use the money was received.

b. Forms of crossing:

General Crossing:

• Not negotiable
• And company and co
• Not transferable

Special Crossing:

• Payee A/C only
• Not negotiable

• Ø Endorsements:

An endorsement is the mode of negotiating, a negotiable instrument.

• Ø Dispatch:

Dispatch includes all correspondence, letter, statements, returns, and telegrams. This dispatch is also known as Mail. Dispatch is primarily divided into two types:

Inward: It means what are receives from the outside.

Outward: It means what sent to the outside.

It is also divided into (a) Ordinary. (b) Registered and (c) Local.

Loan and Advance Division

It’s very important department and a major side of the bank. This department mainly deals with loans that are provided to different parties. There are two major parts of this department:

a. Funded Part:

Over draft and loans comes under this section. By taking collateral from the borrower bank allows to take overdraft facility is a continuous process borrower has to pay interest for the withdrawn money. There are two types of loan:

• Time loan
• Term loan

Funded credits are as follows:

1.       I.    Overdraft: When a current account holder is permitted by the bank to draw more than what stands to his credit, such advance is called an overdraft. The banker may take some collateral security or may grant such advance on the personal security of the borrower. FSBL gives this overdraft facility to its reputed clients.
2.     II.    Consumer credit: Consumer credit is relatively new field of micro credit activities. People with limited income can avail this facility to buy household products such as Furniture, TV, Refrigerator, Car, etc.
3.    III.    General loan: When a advance is made in a lump sum, repayable either in fixed monthly installment or in lump sum and no subsequent deduction allowed except by way of interest or incident charge etc. is called a general loan. The whole amount of loan id debited to the customers name on a loan account to be opened by the bank and is paid to the borrower either in cash or in his/her CD/SD account.
4.   IV.    Payment Against Documents (PAD): A PAD facility is provided by the bank to customer against the banks to documents/bill, like bill of leading, warehouse keeper certificate, delivery receipt, dock warrant. In other word, payment made by bank against lodgment of shipping documents of goods imported through L/C facility under this head.
5.    V.    Packing credit: Packing credits is essentially a short-term advance granted to an exporter for assisting him to process, pack, and ship the goods.

Other funded credits are as:

1.           I.    Staff loan
2.         II.    Term loan
3.        III.    Cash credit hypothecation
4.       IV.    Loan Against Trust Receipt (LTR)
5.        V.    Small loan

b. Non-funded Part:

There is no cash amount involved in this kind of loan. L/C and Bank Guarantee fall in this kind of loan. In case of L/C foreign exchange department mainly deals with it.

Non-funded credits are as follows:

1.           I.    L/C
2.         II.    Bank guarantee

Foreign exchange: 

Refers to the process or mechanism by which the currency of one country is converted into the currency of another country. Foreign exchange is the means and methods by which rights to wealth in a country’s currency are converted into rights to wealth in a country’s currency, in bank when we talk of foreign exchange, we refer to the general mechanism by which a bank converts currency of one country into that of another.

 Foreign exchange is divided in three parts.  

  Export

 Import

  Foreign Remittance

 EXPORT:

The term exports means carrying out of anything from one country to another, as banker we define export as sending of visible things outside the country for sale. In a word export means goods are outwards and foreign currencies are inward. Export trade plays a vital role in the development process of an economy.

 In order to export any goods or services to overseas the exporter must have attested photocopies of the following documents with the up to date ERC. The documents are as follows-

Bill of exchange

 Commercial invoice

 Certificate of origin

  Packing list

 Insurance coverage

  Insurance coverage

  Beneficiary certificate

If the bank authority satisfies with all the information provided by the exporter, steps are taken to smooth out the process of export.

 Procedure of Export:

The Exports Act, 1950 regulate the country’s export trade. There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. These formalities or procedures of export mechanism are enumerated as follows:

 Registration:

The exports from Bangladesh are subject to export trade control exercised by the ministry of commerce through chief controller of imports and exports. No exporter is allowed to export any commodity permissible for export from Bangladesh unless he or she is registered with CCI & E and holds valid export registration certificate (ERC). The ERC number is to be incorporated on EXP forms and other documents connected with exports.

 Obtaining EXP:

After having the registration, the exporter applies to the bank with trade license and ERC for getting EXP. If the bank satisfied an EXP is issued to the exporter. Securing the order after having the registration, the exporter may proceed to secure the export order. Contracting the buyers directly through correspondence can do this.

 Signing of the Contact: The following points are to be mentioned while making a contract-

 Description of the goods

 Quantity of the commodity

 Price of the commodity

 Shipment

  Insurance and marks

  Inspection

 Procuring the Materials:

After making the deal and on having the L/C opened in this favor, the next step for the exports is to set about the task of procuring the contracted merchandise.

Shipment of Goods:

The following the documents normally involved at the stage of shipment 

EXP form

  Photocopy of registration certificate

  Photocopy of the contract

  Photocopy of the L/C

  Freight certificate from the bank

  Railway receipt, barges receipt or truck receipt

  Shipping instructions

  Insurance policy

After those, exporter submits all those documents along with a letter of indemnity to the bank for negotiation; an officer scrutinizes all the documents. If the document is a clean one, FSBL purchases the documents on the basis of banker-customer relationship. This known as foreign documentary Bill purchase (FDBP).

Procedure for FDBP:

After purchasing the documents, FSBL takes FDBP charges from customers A/c. a FDBF register is maintained for recording all the particulars.

 Foreign Documentary bills for Collection:  FDBP signifies that the exporter will receive payment only when the issuing bank gives payment. The exporter submits duplicate EXF form and commercial invoice, an FDBP register is maintained where first entry is given, when the documents are forwarded to the issuing bank for collection and the second one is after realization the proceeds.

Advising L/C:

When L/C export) is transmitted to the bank for advising the bank sends advising letter to the beneficiary depicting that L/C has been issued. The procedure of L/C advising is as follows—

  Verify the signatures

  Given entry in the L/C advising register.

  Issued voucher for L/C advising commission

 Letter of Credit (L/C):

Letter of Credit (L/C) is an arrangement between an importer and the bank (issuing bank). The bank provides L/C in order to purchase goods from the exporter. The bank acts on the behalf of the clients to deal with exporter and the clients make the payments after receiving the goods accordingly.

 Requirement of Opening a L/C:

  Current deposit account holder

  IRC (Import registration Certificate)

  Import policy

  L/C authorizing form duly registered

  L/C authorizing form duly registered

  L/C applications duly fill up and sign

  L/C applications duly fill up and sign

  Contract/indent

  Insurance coverage

  Income tax document

  Contingency liability voucher

  L/C registration

 Back-to-Back Letter of Credit (BTB L/C):

A back-to-back letter of credit is a new credit. The banks main security is the original credit. Bank to back L/C is opened under a master L/C one or more L/C is opened against one master L/C.

 Requirements of Opening a Back-to-Back L/C:

  Master L/C

  Valid import registration certificate and Export Registration certificate

  L/C Application and LCA form duly filled in signed

  Pro-forma invoice or indent

  Insurance cover note.

  IMP form duly signed.

 Types of BTB L/C:

There three types of BTB L/C they are–

  Local BTB L/Cs

  Foreign BTD L/C

  EPZ

Opening Process of a L/C:

a) Approach by the applicant with submission of under mentioned documents:

  Approach letter

  L/C agreement

  L/C authorization form

  IMP form

  Pro forma invoice

  Insurance

b) Preparation of proposal by the branch. Parts of proposal are stated bellow:

  Name and address of the applicant

  Nature of constitution with name of owners

  Nature of business

  IRC # TIN #

  Commodity to be imported

  Beneficiary’s name and address

  Beneficiary’s credit report

  Country of origin Liability

  Security

  Other Conditions

  Recommendation 3 On receipt approval from the competent authority, branch issues L/C.

c) On the issuance of L/C, Branch may use the printed copy as prepared by the individual bank or developed by the concerned official. Related copies are stated bellow:

  Original copy

  Applicant copy

  Advising bank copy

  Issuing bank copy

  CCI and E copy (only for foreign L/C)

d) Parts of a L/C are discussed bellow: 

  The L/C may be irrevocable document

  L/C opening date must be mentioned

  L/C number

  Beneficiary’s name with address

  Applicants name with address

  Advising bank

  Amount

  Date of shipment

  Sight

  Date and place of expiry

  Pro-forma invoice with date that had been sent by the Beneficiary

  Signature of authorized officials

  Other terms and conditions

Documentation:

At first prepare forwarding. Then arrange the following documents—-

  Bill of exchange

  Commercial invoice

  Packing list

  Certificate and other documents

Retirement:

This means wait for payment. When the beneficiary sends the goods, they send related documents for payment to the bank. The bank starts the retirement procedure. At first checking these documents with the L/C, L/C time, date number, invoice, terms and conditions, beneficiary’s.

 Foreign Payment:

The issuing bank prepares voucher, then entries in the IBTA register, ETDA, and then send to the ID. Id informed the bank, which maintains liaison between the issuing bank and advising bank. Then the bank pays to the beneficiary after checking the authentication code.

 Payment:

Then they pay in local payment and foreign payment

Local Payment:

Local payment, the bank used P.O and Demand Draft.

 Import:

Import is foreign goods and services purchased by firms, customers and government in Bangladesh. An importer must have import registration certificate (IRC) given by Chief Controller of Import & Export to import any thing from other country.

 Import Procedure:

The importer enters in to a purchase contract with foreign suppliers. If suppliers have local agent, the importers obtain an indent and pro-forma invoice. If the suppliers have no local agents in Bangladesh, the importers holding valid import registration certificate (IRC).

 Documents that needed for opening an import L/C are listed bellow:

  L/C application duly signed and sealed by the opener.

  At least 4 copies of pro-forma invoice/indent duly signed and sealed by the opener and beneficiary.

  Party application form duly signed and sealed by the opener.

  LCA/IMP forms duly signed and sealed by the opener.

  Beneficiary credit report

  Insurance cover note with money receipt.

 Import Mechanism:

The exports and imports Act, 1950 regulate the country’s import trade. The chief controller of import and export provided the registration to the importer. Then the person secures a letter of credit Authorization from Bangladesh bank. And then a person becomes a qualified importer.

 The import mechanisms are discussed bellow:

  To have an import L/C limit, an importer submits an application to the import department. An officer scrutinizes this application and accordingly prepares a proposal and forwards it to the head office. If the MD satisfies, he sanctions the limit and returns to the branch.

  After sanctioning the limit, an officer of FSBL makes a L/C application.

  After making the L/C application, must be scrutinized by the authority.

  The transmission of L/C is done through tested telex or fax or mai9l to advise the L/C to the beneficiary.

  After receiving all documents, the negotiating bank checks the documents against the credit. It the documents are found in order, the bank will pay accept or negotiate to FSBL.

 The officials have to very much careful while making payment. This task constitutes the following–

  Usually payment is made within seven days after the documents have been received.

  A sale memo is prepared at B.C. rate to the customer. As TI and 00 rate is paid to the ID, the difference between these two rates is exchange trading. Finally, an inter Branch Exchange Trading credit advance is sent to ID.

  For arranging necessary fund for payment, a requisition is sent to the ID

  Telex is transmitted to the correspondent bank ensuring that payment is being made.

 Remittance means to sent or transfer money worth from one place to another In this case, the bank acts as the media to transfer or remit the money. Against the service it charges some commissions from the client.

 Drawing arrangements:    

Drawing arrangements is made to facilitate remittance through concluding accounting relationship between a bank and corresponding, which may exist in the following three forms of accounts.

 NOSTRO A/C:

A foreign currency account that a local bank maintains that account with another bank in abroad.

 VOSTRO A/C:

An account, which a foreign bank maintains with a local bank, is called VOSTRO A/C.

 LORO A/C:

An account, which a third party maintains with a foreign bank, is called LORO A/C.

 Types of Remittance: There are two types of Remittance:

A.   Foreign inward remittance:

The remittance in foreign currency, which is received from outside the country to our country, is known as foreign inward remittance. The remittance can be performed in two proceeds:

  Visible inward remittance: e.g. export proceeds.

  Invisible inward remittance: e.g.; family maintenance consultant fee. Cash is remitted through TT, DO, etc.

 B. Foreign outward remittance: Funds remitted to overseas on behalf of the client:

FSBL FOREIGN TARNSACTIONS:

  Great Britain pound

  U.S Dollar

  EURO

  YEN